Airline SAS hangs in balance despite union deals

AP News

11/19/2012 4:07:59 AM - AP News

COPENHAGEN, Denmark (AP) — The future of Scandinavia's flagship airline SAS hangs in the balance even though it concluded deals Monday with the vast majority of its pilot and cabin crew unions.

The troubled carrier must convince unions of the need to cut jobs, salaries and pensions as part of a restructuring deal with creditors that will keep the airline — half-owned by the Swedish, Danish and Norwegian governments — afloat.

Spokeswoman Elisabeth Manzi said that the Danish cabin crew union CAU has so far refused to sign a new collective agreement, though she declined to give details as to why. Manzi said SAS's board of directors could only proceed with the overhaul plan only after agreements were signed with all eight unions.

In recent years SAS has been pinched by competition from regional discount carriers. The airline has struggled with losses for years and now aims to introduce new cost-cutting measures to restore competitiveness and profitability.

The restructuring plan will slash 800 administrative positions and eventually reduce staff from 15,000 to 9,000 as many services will be outsourced.